There are two basket-case banks in Ireland. Anglo-Irish is one of them, and it should never have been bailed out by the first government guarantee, because it isn’t really a bank at all, but a highly-questionable investment vehicle for speculative property developers.
Now we discover that Seán Fitzpatrick, who resigned last night as Chairman of Anglo Irish Bank, had €87 million in loans from his own bank.
Eighty-seven million! In debt to his own bank! The Chairman!
It seems he had these loans for eight years, but managed to hide them from the shareholders by a simple but effective little trick. You see, every year, just before the books had to be opened to the shareholders, Seánie transferred the loans to another bank and they didn’t appear in the accounts of his own bank.
Wasn’t that handy?
Then, when the heat came off, he was able to transfer the loans back to Anglo-Irish, presumably on reasonably favourable terms. After all, when you’re the chairman, and former chief executive, I imagine you could cut a reasonable deal. Wouldn’t you think?
The extraordinary thing about it all is the number of people who didn’t seem to know that Seánie had this arrangement. For instance, the chief executive, who resigned today, didn’t know. And the Financial regulator, who oversees all Irish banking institutions, didn’t know. And of course, the shareholders obviously didn’t know what the hell was going on.
So. You might be wondering what other bank was so willing to help him with this little difficulty? Why, it’s none other than the second basket-case non-bank, Irish Nationwide, and you might remember me writing about those bozos HERE.
OK, boys and girls. Let me just remind you that these are the same people our government has guaranteed to the tune of €450 billion. That’s Billion, with a B. These are the people who can walk into government offices at midnight and secure a meeting with the leader of our country.
Isn’t it time we called a halt to all this?
UPDATE 20th Dec
I read in today’s papers that the government is going to inject €3 billion of my money and yours to take over this pit of scorpions and tapeworms we call Anglo-Irish Bank, and they’re going to kick out the useless bunch of scumsucking shleeveens masquerading as directors.
But hold on a minute.
It now turns out that the Financial Regulator knew all about the antics of these gobshites since last January — a full year — but did nothing about it until now, and never told the department of finance. So there you have it. Fitzpatrick was bouncing gigantic amounts of money from one bank to another. Enormous sums. €87 million, for God’s sake, sloshing around from one account to another, and nobody asked what the hell was going on. Furthermore, nobody asked if the other pampered, cosseted, smug arseholes on the board were doing the same thing, or for that matter if the directors of all the other banks are at it as well.
Regulation my arse.
It’s now time for the government to stop listening to these guys and start telling them how it’s going to be. If we, the taxpayers, are taking such a huge risk to bail out incompetent and crooked financial institutions, we need to be the ones calling the shots, and that means sacking every last one of the directors, all the senior management and taking them over.
And if they raise a howl of complaint, as they surely will, I have only one piece of advice: Fuck ’em!
UPDATE 23rd December 2008
The government injected €1.5 billion into Anglo-Irish and the bank’s share value collapsed. There’s a simple reason for this. Anglo-Irish has a loan book, the same as all banks, and a proportion of that loan book is taken up with bad, unrecoverable debts. In the case of Anglo, these could amount to as much as €30 billion, because as I told you already, this is not a real bank at all. Like Irish Nationwide, Anglo is only a mechanism to transfer speculative money for property developers, and nothing protects those loans except a few car-parks and a few bedraggled old housing estates across the country in places where nobody will ever buy them.
Therefore, injecting €1.5 billion into Anglo is the same as throwing it out the window of a speeding train, but less fun. It will be swallowed up by the losses.
Why is the government trying to bail out this disaster of a non-bank? Simple. This non-bank bankrolls the developers, and the developers are the ones who grease Fianna Fáil’s palm. Therefore, the government is using public money — vast amounts of it — to prop up Fianna Fáil.
Treason in any man’s language.